Currencies Reverse Course on Disappointing NFP

0
75

Rates as of 0500 GMT

Market Recap

Fridays US nonfarm payrolls were good, but not as good as the market was expecting. The lessthanstellar 559k increase in jobs vs 675k consensus fuelled a USD selloff. The result was basically a reversal of the previous days movements.

Using Bloombergs equivalent of the tradeweighted indices, we can see the movement of most currencies over Friday and this morning is simply the reverse of what they did Thursday and early Friday.

CAD was an underperformer note its distance from the 450 line. Thats because its unemployment data, also released Friday, also disappointed the country lost 68k jobs in May vs expectations of 25k, and the participation rate fell.

This news makes it a bit less likely that the Bank of Canada will taper its bond purchases further at Wednesdays meeting which I didnt think was likely to happen anyway. Thats negative for CAD in case anyone harbored any lingering hopes in that field. Ill be looking for some commentary on these figures in Bank of Canada Deputy Director Lanes Economic Progress Report speech on Thursday. I doubt if theyll be too concerned as virus cases have come down sharply and therefore lockdown measures will be lifted soon.

Oddly enough the goodbutcouldvebeenbetter US payroll figures fuelled a riskon mood in the stock markets as it made a nearterm Fed tightening less likely the ol bad news is good news phenomenon. The SP 500 closed up 0.9 and NASDAQ 1.5.

Over the weekend, the G7 finance…

LEAVE A REPLY

Please enter your comment!
Please enter your name here